Penguin Solutions (NASDAQ:PENG – Get Free Report) and PDF Solutions (NASDAQ:PDFS – Get Free Report) are both technology companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, dividends, risk, profitability, institutional ownership and earnings.
Insider & Institutional Ownership
79.5% of PDF Solutions shares are owned by institutional investors. 2.9% of Penguin Solutions shares are owned by insiders. Comparatively, 11.1% of PDF Solutions shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Penguin Solutions and PDF Solutions, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Penguin Solutions | 1 | 1 | 7 | 1 | 2.80 |
| PDF Solutions | 0 | 3 | 6 | 0 | 2.67 |
Penguin Solutions currently has a consensus price target of $87.50, suggesting a potential upside of 74.65%. PDF Solutions has a consensus price target of $58.17, suggesting a potential upside of 43.13%. Given Penguin Solutions’ stronger consensus rating and higher possible upside, equities analysts plainly believe Penguin Solutions is more favorable than PDF Solutions.
Risk and Volatility
Penguin Solutions has a beta of 2.87, suggesting that its stock price is 187% more volatile than the S&P 500. Comparatively, PDF Solutions has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500.
Valuation and Earnings
This table compares Penguin Solutions and PDF Solutions”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Penguin Solutions | $1.73 billion | 1.74 | $180.62 million | $2.59 | 19.34 |
| PDF Solutions | $219.02 million | 7.84 | -$640,000.00 | $0.38 | 106.95 |
Penguin Solutions has higher revenue and earnings than PDF Solutions. Penguin Solutions is trading at a lower price-to-earnings ratio than PDF Solutions, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Penguin Solutions and PDF Solutions’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Penguin Solutions | 10.43% | 36.71% | 7.95% |
| PDF Solutions | 6.28% | 8.12% | 5.56% |
Summary
Penguin Solutions beats PDF Solutions on 11 of the 15 factors compared between the two stocks.
About Penguin Solutions
Penguin Solutions, formerly known as SMART Global Holdings, provides computing and memory technologies for businesses and public-sector organizations. Its offerings include systems for artificial intelligence, high-performance computing and edge computing, as well as memory modules and storage products. The company’s portfolio includes Penguin Computing solutions for advanced computing and AI workloads, Stratus platforms designed for continuous availability, and SMART Modular memory and storage products.
About PDF Solutions
PDF Solutions provides software, connectivity products and services for the semiconductor and electronics industries. Its offerings help manufacturers collect and analyze production data, monitor processes and identify opportunities to improve yield, quality and operational efficiency. The company’s Exensio platform supports analytics across semiconductor design and manufacturing, while its Cimetrix products provide software for connecting and controlling manufacturing equipment. PDF Solutions also offers engineering and consulting services to help customers implement its technologies and address manufacturing challenges.
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